So, who knew the Los Angeles Lakers were in such a financial bind?
The NBA franchise, which Forbes estimates is worth $4.4 billion and has player payroll of $125 million, applied for and received a $4.4 million loan through the federal government’s Paycheck Protection Program (PPP).
Congress initially approved $349 billion, followed by another $310 billion, for the PPP as a lifeline to small businesses wrecked by the pandemic. The initial bucket of money dried up because of overwhelming demand and some questionable participants.
An NBC News analysis of the forgivable loans through the Small Business Administration (SBA) determined that over 200 publicly traded companies have disclosed receiving a total of $800 million through the program. A few of the companies, apparently embarrassed after the public disclosure, have paid back the money, the Lakers among them.
“I’m a big Lakers fan, but I’m enraged they took that loan,” said Treasury Secretary Steve Mnuchin. “I’m glad they paid it back.” Mnuchin has promised a tighter rein on the new pot of money.
“Before we forgive these loans, we’ll check every single one over $2 million,” he told Fox News. “So, anybody that took the money that shouldn’t have taken the money, one it won’t be forgiven, and two, they may be subject to criminal liability, which is a big deal.”
Meanwhile the start of the second installment of the PPP Monday was almost as shaky as the first loans. Banks complained that the SBA website repeatedly crashed. Sally Cline, President and CEO of the West Virginia Bankers Association, said her members were frustrated with day one of round two.
“The lack of access to E-Tran (the SBA portal for the program) was across the board (banks of all sizes) and the end result is that these problems slow the delivery of this much needed aid to small businesses,” she told me in an email Tuesday. “Hoping for a better day today.”
The SBA reports 7,861 West Virginia small businesses (fewer than 500 employees) had $1.4 billion in loans approved in round one, but many more small businesses were shut out. Main Street Alliance Executive Director Amanda Ballantyne said the SBA and Treasury Department were reckless to release a second round of funding before major gaps were resolved.
“The program still lacks clear terms of forgiveness, rules prohibiting banks from again prioritizing applications of larger clients, and guidance for new lenders to come online to the program,” she said.
Small businesses are the backbone of West Virginia’s economy, making up 99 percent of all businesses. The estimated 113,000 small businesses employ over 275,000 people, about half of the state’s workforce.
The approval of the loans so far will help save over 7,000 businesses, but clearly many more of our state’s entrepreneurs are trying desperately to access the program before it runs out of money again.